Marc Stein

Calvin Watkins

ESPN Staff Writer

Calvin Watkins covers the Houston Rockets and the NBA for ESPN.com. He joined ESPNDallas.com in September 2009. He's covered the Dallas Cowboys and Texas Rangers as well as colleges, boxing and high school sports.

Sources told ESPN that the Rockets on Friday formally pulled the four-year, $37 million offer sheet from the Brooklyn Nets that they matched earlier this week then replaced it with a new four-year deal that could also be worth as much as $37 million.

The new deal, however, provides the Rockets with a more favorable guarantee date for the 2017-18 season while also ensuring that Motiejunas will earn $8.3 million this season. Under the original offer sheet, Motiejunas was guaranteed $5 million this season.

"He has IQ, size, back-to-the-basket scoring, another skilled big. He does a lot. He can shoot the 3," guard Patrick Beverley said of Motiejunas on Friday. "People don't understand he might not be a big athletic person but he's always in the right places, taking charges and stuff. So DMo is a big key to what we've been doing the last couple of years."

The agreement is pending a physical, which is scheduled for Friday, sources told ESPN.

The Vertical first reported the agreement between the Rockets and Motiejunas.

Donatas Motiejunas has agreed to a four-year contract with the Rockets, league sources told ESPN. Bill Baptist/NBAE/Getty Images

Motiejunas refused to report to the Rockets this week after Houston matched Brooklyn's incentive-laden offer sheet. At the root of Motiejunas' discontent, sources said, was the fact that Houston was not required under league rules to match the $6 million in bonuses in the original $37 million contract constructed by the Nets, meaning that $31 million was the most Motiejunas could earn as a Rocket.

But the sides, sources say, worked out new terms that significantly increase the amount of guaranteed money Motiejunas will earn this season while also providing Houston with more future flexibility in terms of either keeping or trading the 7-footer.

It is too late for the Rockets to trade Motiejunas this season, but the new contract does not come with the various trade restrictions that matching an offer sheet would, meaning Motiejunas will now become trade eligible the day after Houston's season ends.

In the new deal, Motiejunas' guarantee date for next season's $9 million salary has been moved from March 1 to mid-July, which essentially makes the final three years of the four-year contract nonguaranteed. That's more along the lines of what Houston wanted to do all along; ESPN reported in November that Houston was offering him a two-year deal starting in the $7 million to $8 million range but with only the first season fully guaranteed in a nod to Motiejunas' history of back issues.

Sources said Houston pulled the two-year offer on Nov. 22 because Motiejunas would be trade-eligible this season only if he were under contract by Nov. 23 because the NBA's annual trade deadline falls exactly three months later on Feb. 23. Motiejunas then signed an offer sheet with the Nets on Dec. 2.